* China cotton futures hit 13,425 yuan/T, highest since Sept
2014
* Prices have jumped more than 25 pct so far this month
BEIJING, April 21 (Reuters) - China's cotton futures
extended a rally on Thursday as speculative buying pushed prices
to the highest in more than a year in anticipation of tight
supplies after Beijing delayed sales from its state cotton
reserves, traders said.
The most-active September 2016 contract at the
Zhengzhou Commodity Exchange was traded up by more than 6
percent to an intra-day high of 13,425 yuan ($2,073.23) per
tonne, the highest since September 2014.
The price has jumped about a quarter so far this month,
outpacing gains in the U.S. market.
"Funds are pushing up the prices, there is too much
liquidity in the market," said Zhang Hongzhou with Galaxy
Futures.
Delayed sales by Beijing of its massive state cotton
reserves have cut the supply available to textile mills, which
are having to buy from merchants that are holding on to their
stock in anticipation of even higher prices, said Zhang.
Beijing said on April 15 it would start its annual state
cotton sales from early May, about a month later than the market
had expected..
The rally in cotton has come despite the country's top
planning commission saying this week it may increase sales from
the state reserves to more than 2 million tonnes this year after
the recent price spike.
The National Development and Reform Commission (NDRC) also
said it would continue to increase the sales if there is a big
supply gap before September's harvest, according to a report
posted on an industry website (www.cncotton.com).
Expectations of a domestic supply gap larger than 2 million
tonnes this year - after Beijing has capped imports and farmers
work to reduce planting acreage - have triggered funds buying,
said Wang Guangqian with Dong Wu Futures.
China's cotton imports in March fell 54.7 percent on year to
57,900 tonnes, according to official customs data published on
Thursday.
($1 = 6.4754 yuan)
(Reporting by Niu Shuping; Editing by Tom Hogue)
